United States - Visa and Mastercard beneficiaries of State Department lobbying effort

Visa and Mastercard both received lobbying support from the Department of State under President Obama, the latest Cablegate release reveals.

A cable from the Moscow embassy, dated 1st February 2010, details a new Russian card processing law which the embassy said would “disadvantage U.S businesses”, and urged senior US officials to take action. (click here).

“This draft law continues to disadvantage U.S. payment card market leaders Visa and MasterCard, whether they join the National Payment Card System or not,” it said.

Russia was considering whether to implement a new system of card payments (called NPCS), which would create a new payment processor run by Russia’s state banks. This would then handle all processing for domestic banking in the country.

“The fees for these services are estimated at Rb 120 billion ($4 billion) annually...the vast majority of Visa’s business in Russia is done with cards issued and used in Russia; with earnings from processing going to NPCS, Visa would no longer profit from these transactions.”

When discussing possible causes of the restrictive legislation, a senior Visa employee in the country told embassy officials he believed the move was due to Russian suspicions that Visa and Mastercard passed information to the US government.

“[Redacted] believes that, at least at the Deputy Minister level, MinFin’s hands are tied. Implying that Russian security services were behind this decision, [redacted] said, ‘There is some se-cret (government) order that no one has seen, but everyone has to abide by it."
“As described reftel, credit card company and bank representatives have told us that GOR (government of Russia) officials apparently assume that US payment systems routinely share data associated with payment transactions by Russian cardholders with intelligence services in the US and elsewhere.”

The embassy’s economic officer, Matthias Mitman, concluded his cable by calling for action.

“While the draft legislation has yet to be submitted to the Duma and can still be amended, post will continue to raise our concerns with senior GOR officials,” he said.

“We recommend that senior USG officials also take advantage of meetings with their Russian counterparts, including through the Bilateral Presidential Commission, to press the GOR to change the draft text to ensure U.S. payment companies are not adversely affected.”